Ibovespa Declines as Banks and Petrobras Slide

The Ibovespa fell nearly 1% to trade below 184,000 on Friday, weighed down by losses in the energy and banking sectors. Oil prices pulled back despite ongoing tensions between the US and Iran, dragging Petrobras down nearly 1%. Major banks also traded mostly lower as expectations for a September US Fed rate hike increased following a strong US jobs report. Itaú and Bradesco shed more than 0.5%. Among other financials, Itaúsa fell about 0.5%, while B3 declined nearly 1%. Utilities also traded lower, with Axia down nearly 0.5% and Sabesp losing around 1%. Vale edged lower as iron ore prices remained muted. WEG fell nearly 1%, while Rede D’Or declined about 0.5%. The latest Datafolha poll on Brazil’s presidential race, released on Thursday, showed President Lula’s numerical lead over Senator Flávio Bolsonaro narrowing, reinforcing a technical tie between the two in a potential October runoff.

The Ibovespa closed flat at 185,188 on Thursday, ending an 11-session winning streak. The index had climbed nearly 2% at the open before investors took profits. The rally had been supported by recent election polls showing President Lula narrowing his lead over Flávio Bolsonaro, who is viewed by markets as more fiscally restrictive amid elevated yields and weak business activity. A Datafolha poll was due later Thursday. Meanwhile, although the latest economic activity data pointed to a second consecutive contraction in private-sector activity, the downturn was less severe than in the previous month. Services activity rebounded slightly as demand conditions showed signs of stabilisation. Major banks helped offset losses, with Itaú up 1.2%, Santander gaining 1.7%, and Banco do Brasil adding 0.8%. Embraer rose 1.5% after announcing a cybersecurity business combination with SPX Capital. CSN surged 6.7% after announcing a change of CEO. Vale fell 2.9% and Petrobras declined 1.3%.

The Ibovespa gained over 1.5% to trade above 188,000 on Thursday, extending the previous session’s rally and heading for a 12th consecutive session of gains ahead of a new election poll. Datafolha’s poll is due later Thursday, following a Quaest poll released on Wednesday that showed President Lula and Senator Flávio Bolsonaro, seen by markets as more fiscally restrictive amid elevated yields and weak business activity, in a technical tie in a potential runoff. Shares of major banks rose, with Itaú up 1.5%, Bradesco gaining about 1% and Banco do Brasil advancing nearly 2%. Among other financials, Itaúsa rose nearly 2% and B3 gained almost 3%. Utilities also advanced, with Axia and Sabesp adding around 1.5%. Petrobras rose nearly 1.5% as oil prices climbed amid escalating Middle East tensions. Vale gained nearly 1% on higher iron ore prices. Among steelmakers, CSN soared near 20% after announcing that Benjamin Steinbruch would step down as CEO and be replaced by Fabio Schvartsman.